Footnote

Life Insurance

Whole Life Insurance

  1. Assumes that all premiums are paid. The amount of your payments will directly affect your policy’s cash value, as well as your ability to maintain coverage in the future.

  2. Your policy’s cash value typically becomes a useful source of funds only after several years of premium payments, allowing the cash value to accumulate. Each method of utilizing your policy’s cash value has advantages and disadvantages, subject to different tax consequences. Surrenders, withdrawals, and loans against a policy will reduce the policy’s cash surrender value and death benefit and may also affect any dividends. Generally, surrenders and withdrawals are taxable to the extent they exceed the cost basis of the policy, while loans are not taxable when taken. However, loans taken against a life insurance policy can have adverse effects if not managed properly. Policy loans and automatic premium loans, including accrued interest, must be repaid either in cash or from policy values upon policy termination or the death of the insured. Failure to repay these loans may trigger significant tax liabilities, and little or no cash surrender value may remain to pay the tax. If loans equal or exceed the cash value, the policy will terminate unless additional cash payments are made. Policyholders should consult with their tax advisors or financial professional regarding the potential impact of surrenders, withdrawals, or loans.

  3. Subject to age, insurability requirements, tax code limits, and the policy maintaining a minimum cash value to cover expenses.

Universal Life

  1. Coverage lasts as long as all required premiums are paid.

  2. Adjustments to premiums and payment schedules are subject to policy terms and may require maintaining sufficient cash value to cover policy expenses.

Indexed Universal Life

  1. Indexed-linked options do not directly invest in the stock market. Cash value accumulation depends on the policy’s terms, caps, and participation rates, which may limit the upside potential based on index performance. Policyholders should review their policy details to understand how index performance affects cash value.

  2. Access to cash value is subject to policy terms and may take several years to build up. Surrenders, withdrawals, or loans may reduce the death benefit and cash surrender value and could have tax implications. Loans must be repaid in cash or deducted from the policy’s value upon policy termination or death of the insured. Consult with a tax advisor to understand any tax liabilities.

Term Insurance

  1. Conversion to permanent coverage is subject to the policy’s terms and may require meeting certain conditions, including age and health requirements.

Annuities

All annuities may be subject to income tax upon withdrawal, and withdrawals made before age 59½ may incur additional penalties. Surrender fees may also apply if funds are accessed during the surrender period specified in the annuity contract. Please consult with your insurance specialist for more information.

Fixed Annuities

1. Guaranteed interest rates are subject to the terms of the annuity contract and the financial strength of the issuing insurance company.

2. Fixed annuities may limit growth potential compared to market-linked investments, but offer protection from market volatility.

Indexed Annuities

  1. Indexed annuities do not directly invest in the stock market. Returns are based on the index performance subject to caps, participation rates, and spreads set by the annuity contract.

  2. While indexed annuities offer downside protection, there is also a limit on the potential gains due to the policy terms.

Immediate Annuities

  1. Payouts usually begin within 12 months of the initial investment, depending on the terms of the contract.

  2. Immediate annuities provide a guaranteed income stream but may not offer flexibility in adjusting payments or accessing the principal once payouts begin.

Deferred Annuities

  1. Earnings accumulate without immediate tax liability, but withdrawals during the payout phase may be subject to income tax and potential penalties if taken before age 59½.

  2. The timing of payouts and payment amounts depend on the terms of the contract and your chosen annuitization option.

Retirement Account

  1. Educational Purposes Only: The content in this section is intended for educational purposes and does not provide financial, legal, or tax advice.

  2. Consult a Professional: Always consult with a qualified financial advisor to develop a retirement plan tailored to your unique circumstances and goals.

  3. Collaboration with Experts: FinZ professionals are not tax or legal experts. For complex legal or tax matters, we recommend working with a tax advisor or attorney.

Estate Planning

  1. The information provided here is for educational purposes only and does not constitute legal or tax advice. Estate planning decisions should be made with the guidance of an experienced estate planning attorney. FinZ Financial and Insurance Solutions professionals are not estate tax attorneys but can work with your attorney to develop a comprehensive plan.

  2. Estate planning documents, including wills, trusts, and powers of attorney, are subject to state-specific laws. Consultation with a qualified estate planning attorney is recommended to ensure compliance and proper execution of these documents.

  3. FinZ Financial and Insurance Solutions collaborates with professional estate planning attorneys to provide guidance but does not offer legal or tax services. For complex tax and legal matters, please consult your attorney or tax advisor.